LetsdoEcon_Market Failure

A shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers. Examples: Roads, mail, military.

• Common access resources

• Public goods

• Private goods

• Goods with negative externalities

Negative externalities can be best described as

• When the consumption/production of a good or service has a negative impact on a third party

• When the consumption/production of a good or service has any impact on a third party

• When the consumption/production of a good or service has a positive impact on a third party

• When the consumption/production of a good or service depletes the access for a third party

Which of the following diagrams best represents the market for vaccines?

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Which of the following diagrams best represents the market for sugary drinks?

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Market failure can be

• When the free market fails to provide at all

• When the free market provides too much

• When the free market provides too little

• When the free market clears at a high price

Marginal Social Cost curve is

• upward sloping

• downward sloping

Private benefits plus external benefits is

• External benefit

• Social benefits

• Private benefits

If society thinks that the market provides too much, it is because it is a ...

• Demerit good

• Merit good

The use of advertisement to decrease negative externality of consumption affects

• Marginal social cost

• Marginal private cost

• Marginal social benefit

• Marginal private benefit

The use of taxes to decrease negative externality of production affects

• Marginal social cost

• Marginal private cost

• Marginal social benefit

• Marginal private benefit